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AK House passes $9.5 billion operating budget

JUNEAU — The Alaska House on Thursday passed a $9.5 billion state operating budget.

The 31-5 early evening vote came after hours of debate, split over two floor sessions. The dissenting votes came from minority Democrats, including Rep. Mike Doogan, who said the budget is too fat.

The spending plan compares to the $9 billion budget enacted for the current year, and could still grow: The Senate gets it next.

Agencies with the biggest budgets are health and social services, education, the University of Alaska system and transportation. The administration has blamed budget increases over the last several years, in large part, on formula-driven programs, like education and Medicaid.

The bill restores funds for a pre-kindergarten program; cuts made in subcommittee to pre-kindergarten and teacher mentoring programs raised concerns about whether those cuts would result in a violation of an agreement to settle a lawsuit over education quality.

It deletes funding for the Alaska Natural Gas Development Authority, with language included a budget amendment earlier this week saying other state agencies have taken the lead in trying to commercialize Alaska gas. The authority was established by a voter initiative in 2002. Minority Democrats tried unsuccessfully to get the money restored.

Rep. Bill Thomas, R-Haines, and co-chair of the House Finance Committee, said lawmakers worked hard to try to slow the growth of government. He said the budget is responsible and meets the needs of Alaskans.

He said he and co-chair Bill Stoltze planned to work with the Senate Finance Committee leaders to craft a savings plan. Given the high oil prices, the state could have surpluses of more than $3 billion between this year and next.

During floor debate, representatives took up, and voted down, a series of amendments, including one that would have transferred $2 billion from the general fund to the Permanent Fund as a means of savings and one that would have put another $46.2 million toward education. Both of those proposals were sponsored by minority Democrats.

Thomas spoke against the money transfer proposed by Doogan, D-Anchorage. Thomas said the state has billions of dollars in reserves now but he said it also has huge obligations, like $11 billion in unfunded pension liabilities.

With declining oil production — the state relies heavily on oil revenues — Thomas said the state could be in deficit spending in the next few years. He said the state must make sure it has the money available to provide the services Alaskans want.

The Permanent Fund is far more difficult for lawmakers to get access to than other state savings accounts. Doogan, a finance committee member, said it’s time the state truly put some money away.

As for the education amendment, Rep. Bill Stoltze, R-Chugiak, spoke against it, saying the finance committee, which he co-chairs, plans to take a more holistic look at the funding issue.

There are several bills or proposals pending in the Legislature that would address different aspects of funding for education, including one that would provide automatic increases for three years.

Gov. Sean Parnell had requested that $30.3 million be added to the operating budget to address increases in school energy and student transportation costs. But it was left out for the same reason — committee leaders wanted to take a more in-depth look at the funding issue.

All but one of the amendments was sponsored by Democrats. The other was an amendment to an amendment, from Rep. Kyle Johansen. It would have moved the $2 billion to the vessel replacement fund for the Alaska marine highway system rather than to the Permanent Fund.

Johansen, R-Ketchikan, said lawmakers have talked about the importance of the Arctic and he said the money could be used to help build an icebreaker vessel.

Rep. Steve Thompson, R-Fairbanks, said there were too many unanswered questions about the proposal.

Rep. Charisse Millett, R-Anchorage, said she hoped lawmakers would have “serious” budget meetings during the summer and interim on what she called meaningful, responsible and sustainable spending.